Central Europe on the location map of Europe
The Ernst & Young Annual report 2002 on the pan European location of 1974 large investment projects is symbolic of the much wider scope of the decision makers. In spite of the shortcomings of this kind of partial investigation, five lessons can be drawn from the CEECs ranking in the projects listed in 2001:
Central Europe is far from constituting the core location of the investment projects in the whole of Europe, but it clearly starts to take a significant place. With the exception of Poland, which recorded its peak in 1999 and remains at the 14th position (over 25 countries surveyed), all the remaining CEECs improved their position last year. On the total projects listed, Hungary and the Czech Republic were each selected for nearly 4% of them, and reached the 7th and 8th rank respectively, just after Belgium. A new and positive fact for the second wave of applicant countries: Romania is ranked 15th, just before Finland for example.
The investment projects in CEEC have two characteristics: the majority of them are greenfield investments (77% of the industrial projects) in opposition to capacity extensions; they attract the largest projects in term of labor force since they represent more than half of the 36 projects with more than 1000 people, and even 70% in industry: 32 projects overall, including 8 in Czech Republic, 3 in Hungary and 3 in Slovakia. Despite the rising attraction of CEECs’ in manufacturing investment projects, France and the United Kingdom remained the most favored destinations in this field last year.
In terms of sectors, several centers of intermediate technologies appear in the automotive industry, in electronics or in chemistry-pharmacy. In the car industry, Hungary and Poland account each for 4% of the total 96 European projects. For the automotive suppliers, the Czech Republic took the first place last year in Europe with 20% of the 125 projects, including 3 of the 10 largest investments announced. In electronics, Hungary remains the most dynamic within the CEECs but even in this industry, U.K. and France are still the most dynamic poles in Europe.
Despite the growing emergence of Central Europe on the industrial map of Europe, it is necessary to remain realist on the magnitude of its attraction, especially compared to the EU15 member states. The number of operations as well as the sectors covered still put France at the 2nd rank (13%) behind the United Kingdom (16%) and before Germany (9%). At the regional level, Ile de France stays with the leading trio, after London and before Catalonia. Nevertheless, the combination of the sectoral and regional rankings of the Ernst & Young survey shows that the benefits of the EU enlargement for the existing members will depend on their capability of adaptation to the new competitive landscape. In the R&D, the region of the Ile de France once again appears at the top of the European league followed by Catalonia, Madrid and Stockholm whereas not one CEEC belongs to this high tech league. Furthermore Ile de France is even ranked n°1 in the software industry. In electronics also, a center like Grenoble, East of France, will receive 2,8bns of investment from STM, Motorola and Philips for one of the top design and manufacturing production facility in semiconductors. In the car industry, the Alsace region, border of Germany, still belongs to the most attractive European areas, CEEC’s included, with Catalonia and Moscow just behind. The same is true for the chemical industry.
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